Cybersquatting

Cybersquatting Definition:

Registration, trading or using a domain name with the intention of gaining profits from the kindness of someone else’s trademark is called cybersquatting, according to the U.S. Federal Law known as the Anti-Cybersquatting Consumer Protection Act (ACPA). The domain name is then offered for sale by the cybersquatter to the trademark owner for a high price

Cyber law:

Cyber law, is been fast evolving into its own castigation pushing the traditional law firms into lucrative new legal areas. Legal combats most active area has been domain name disputes that involve indictments of trademark infringement, habitually by cybersquatters. Introduced by United States for the first time, cyberspace specific trademark legislation with Anti-Cybersquatting Infringement Act of 1999 (ACPA) was inclusive in US Trademark law.

Trademark Law:

Trademark law, has advanced to certify that the consumer is not mislead with respect to the product source. Accordingly trademark law helps maintain quality assurance. The benefits extend to the trademark owner. A trademark signifies a substantial expanse of benevolence from the view point of trust and recognition of customers. Hence, the trademark becomes valuable assets to businesses that their owners are profound to protect. Internet being most widely used commercial tool, company’s haven been beleaguered by cybersquatters. These squatters register trademarks as domain names thereby not allowing the trademark owners’ have their website created using their own mark. Since domain name disputes encompass trademark, traditional trademark law has been applied as well bigoted competition, slander, distorted and deceptive practises and passing off.

Domain name disputes:

In 1993, very few businesses realised the commercial opportunities with internet still being in its infancy. The leading corporations were also slow to identify the use of technology provided by internet those days. In 1995, the number of domain names registered worldwide was 100,000 and 5 million in 1999. By 2000, this number jumped to 15 million domain names. In recent times, there has been a rapid increase in the growth of businesses and in respective domain name registration. Domain name registration has heated up from then.

Domain names are more than just addresses, as the court suggested

– Cardservice Int’l v McGee: “A customer who is unsure about a company’s domain name will often guess that the domain name is also the company’s name”

– MTV Networks Inc v Curry: “A domain name mirroring a corporate name may be a valuable corporate asset, as it facilitates communication with a customer base”

Trademark as domain names are not only disputed by businesses, but also by the individuals whose names are being used as trademarks, celebrity domain names like modonna.com, string.com etc.,

Domain name disputes usually arise when cybersquatters intentionally register domain names that include a trademarked word, company name, name brand of product or even celebrity names.

Trademark Infringement:

Domain name is the internet protocol address uniquely assigned to a single computer via internet. Once this IP address coincides with name of a business that moment it becomes a valuable asset. For instance, an IP address 192.160.1.30 when turned into something like puma.com, this leads us to a totally new world which would involve consumer recognition and loyalty towards the brand or trademark. The association with the trademark makes the domain name a profitable tool.

Cybersquatting:

Cybersquatting is a process of registration of a trademark as a domain name and trading it with the intent of gaining profits. A trademark cannot be registered as a domain name by the owner itself until it is owned by the cybersquatter. This results in a breach of fundamental rights for the owner to use the trademark.

Intentional bad faith usage in domain names that are similar to the existing trademarks is the negativity of cybersquatting. These registrants are considered “modern day extortion”. A fitting definition: “an illegal cybersquatter should be one who acquires a domain name for the sole purpose of obtaining money or other advantage from the trademark owner, with no intent or desire to use the domain name, except as an instrument toward this purpose.”

Before 1999, Internet as a tool for success was still being resisted by businesses across the world. Cybersquatters took advantage of growing importance of the internet and the ignorance of the businesses towards it. This gave birth to cybersquatters who registered domain names identical to business trademarks. Since customers and clients try to find businesses online, this became an issue for the companies whose trademarks were already taken by the squatters as they could no longer have their trademarks as domain names. Cybersquatting causes monetary losses and damaged reputation to businesses.

Dennis Toeppen, an entrant to cybersquatting registered a host of well-known trademarks as domain names, was always unsuccessful in defending himself. The trademark owners had law suits against him. Intermatic v Toeppen and Panavision v Toeppen were the focal cybersquatting cases and were the lead to the development of cybersquatting case law and leading to the drafting of the Anti-Cybersquatting Consumer Protection Act in 1999.

Types of Cybersquatting:

The World Intellectual Property Organization (WIPO), reports that cybersquatting is exploding globally ever since 2006. New methods have been developed to gain control of potentially lucrative addresses that have resulted in many trademark owners being stymied when trying to bring their product directly to consumers via the internet.

The most common types of cybersquatting,

– Cybersquatting: Bad-Faith intent registration; a cybersquatter can sell to the highest bidder.

– Typosquatting: also called as URL hijacking. Cybersquatting form wherein the internet users make typographical errors while inputting a website address into the web browser. Once the user types the incorrect address, they are lead to a substitute website by the cybersquatter.

In the United States, the 1999 Anti-Cybersquatting Consumer Protection Act includes, Section 3(a), amending 15 USC § 1117, with a sub-section (d) (2) (B) (ii) aimed at combating Typosquatting.

Under Uniform Domain-Name Dispute-Resolution Policy (UDRP), trademark holders can file a case at the World Intellectual Property Organization (WIPO) against typosquatters. The complaint has to show that the recorded domain name is undistinguishable or bafflingly relating to their trademark and there is no legitimate interest in the domain name used in bad faith by the registrant.

– Domainer: a purveyor of domain names, who earns money from buying and selling them.

– Dropcatcher: internet domain name registrations are valid and expire within a certain time period. Re-registration of the domain name by the owner with an internet registrar prior to the expiration date is essential; if not then anyone can purchase the domain name after the lapse. Cybersquatters can use an automated tool to register the lapsed name immediately leading to a gain of the domain name.

– Domain Tasting: getting domains for a five-day free refund period to test, then dropping for refund the one’s that did not pan out.

– Domain parking: A way of making money by having a small site with just advertising linked to a related domain name, where the owner paid a small amount whenever a person clicks on an ad; which can add up to millions in some cases.

Anti-Cybersquatting Consumer Protection Act (ACPA)

In the late 1990s, in the disharmony over domain names and Internet governance, lead to a single issue over which there was coarse accord: cybersquatters bad. During late 1990s, the White House DNS White Paper singled out cybersquatting as a problem; Federal Courts had perpetual disdain for Cybersquatters; and the 106th Congress, a gridlocked Congress, found it difficult to permit the Anti-Cybersquatting Consumer Protection Act (ACPA), 15 U.S.C. § 1125(d).

ACPA was designed for “who register numerous domain names containing American trademarks or trade names in order to have ransom in exchange for money” in order to prevent cybersquatting.

The ACPA, the person who registers the domain name can be sued by the trademark owner. In rem provision can be used by the plaintiff to sue once defining that the plaintiff cannot get personal jurisdiction over the defendant or with good faith efforts the defendant cannot be reached.

Under ACPA, a trademark owner may bring a course of action against a domain name registrant who (1) has the intention to gain profits from the trademarks in bad faith and (2) records, traffics in, or uses a domain name that is (i) analogous to or dilutive of a famous mark, or (ii) is a trademark protected by 18 U.S.C. § 706 (marks involving the Red Cross) or 36 U.S.C. § 220506 (marks relating to the “Olympics”). While § 1125 protects trademark owners, 15 U.S.C. § 1129 protects any living person from having their personal name included in a domain name, but only when the domain name is registered for profitable resale.

* The key element is to determine the intent of bad faith

Identifying Bad Faith:

ACPA helps the court in identifying the existence of bad faith which would aid to award the plaintiff statutory of any kind: following are few nonexclusive factors,

– Domain name owners’ rights;

– Owner has his name in the domain name;

– Domain name used by the owner for services or product sales;

– Use of the trademark on an concomitant website or for noncommercial purpose by the holder

– Misleading the consumers to another website from the owners’ for personal gain or stain the trademark by creating confusion;

– Domain name is sold by the owner without the intention of selling products

– Register domain names by the owner only for selling it back to the trademark holders;

– Providing wrong contact details while registering the domain name;

– Having multiple domain names which are similar to other trademarks; and

– Credibility of the trademark according to Lanham Act.

Internet Corporation for Assigned Names and Numbers

(ICANN)

ICANN is a non-profit company, headquartered in California was created in September 1998 to supervise several Internet-related tasks formerly handled by Internet Assigned Numbers Authority (IANA). ICANN is involved in the management and assignment of the Internet Protocol addresses.

Bad faith by ICANN considering the following factors;

– Registering the domain name by the owner with the intention of selling it to the trademark holder charging price higher than the actual cost of the domain name;

– Registration of the domain name making it impossible for the trademark owner to use the same in their domain name;

– Registering the domain name primarily to harm the competitors’ business; or

– Intentional use of the domain name in order to attract internet users to his website for gains

Uniform Domain Name Dispute Resolution Policy (UDRP)

The Uniform Domain-Name Dispute Resolution Policy (UDRP) has been adopted by ICANN-accredited registrars in all gTLDs (.aero, .asia, .biz, .cat, .com, .coop, .info, .jobs, .mobi, .museum, .name, .net, .org, .pro, .tel and .travel). Dispute proceedings arising from domain names being abusively registered (for example, cybersquatting) are initiated by a holder of trademark rights.

All registrars must follow UDRP. Before cancellation or withdrawal of the domain name by the registrar, the court action must resolve the most of the domain name disputes under this policy. Disputes alleged to arise from abusive registrations of domain names (for example, cybersquatting) may be addressed by expedited administrative proceedings that the holder of trademark rights initiates by filing a complaint with an approved dispute-resolution service provider.

To invoke the policy, a trademark owner should either

1. 1. A complaint can be filed against the domain name owner in the court with proper jurisdiction or with proper in-rem action persists regarding the domain name or
   2. Complaint to a permitted Dispute Resolution service provider in case of offensive registration

– Uniform Domain Name Dispute Resolution Policy — All registrars follow this policy

– Rules for Uniform Domain Name Dispute Resolution Policy – With supplements by each provider’s supplemental rules, all Dispute Resolution service providers use these rules

When a registrant chooses a domain name, the registrant must “represent and warrant,” among other things, that registering the name “third party rights will not be infringed or violated,” and agree to participate in an arbitration-like proceeding should any third party assert such a claim.

Three elements need to be succeeded for an objection in UDRP happenings,

– Rights to complaint if the domain name is similar or identical to the trademark;

– There is no rights or genuine interest in the domain name by the registrant; and

– Usage of the domain name by registrant in bad faith

Assessment of bad faith by UDRP was done using the following factors:

– Whether the registrant has the domain name registered mostly for the purpose of retailing, leasing, or otherwise giving the domain name registration to the trademark owner;

– Whether the registrant has done the domain name registration to avoid the owner of the trademark who is using the domain name to reflect the mark, if the domain name owner is involved in such a manner; and

– Registering the domain name by the registrant chiefly with the determination of troublemaking to the competitors’ business; or

– Intentionally using the domain name by the registrant to attract internet users for commercial gains or misleading with the mark.

The main aim of UDRP is to design inexpensive and quicker process for solving these kinds of disputes.

UDRP includes simple set of rules developed by ICANN in order to resolve domain name disputes. ICANN established a list of approved ADR’s (Alternative Dispute Resolution) allowed using the UDRP:

– Asian Domain Name Dispute Resolution Centre

– National Arbitration Forum (NAF)

– WIPO

– Czech Arbitration Court Arbitration Centre for Internet Disputes (CAC)

Comparing ACPA and UDRP:

– ACPA was mainly created in order for trademark owners to obtain remedies for bad faith usage by a defendant. The key element of this act is that the plaintiff must prove the “bad faith” intent of the defendant.

– UDRP requires that domain name registrants follow its streamlined rules to avoid and weed out cybersquatters. UDRP also established an administrative procedure for speedy, low-cost resolution of a specific category of disputes.

Below diagram gives clear distinguish between the two,

WIPO: Cybersquatting on the Rise

World Intellectual Property Organization states Cybersquatting has been on ride ever since boom in internet. The number of annual cases isn’t even back at 2000 levels yet. Here are the actual numbers:

2000 – 1,857 cases

2001 – 1,556 cases

2002 – 1,208 cases

2003 – 1,100 cases

2004 – 1,176 cases

2005 – 1,456 cases

2006 – 1,823 cases

Cybersquatting in United States:

The first ever case of cybersquatting in United States arose in 1994 and from then have multiplied almost the whole world. It all started by person named Dennis Toeppen, who used several known trademarks to register domain names and was unsuccessful in defending his rights when he was sued by the trademark owners. The two important cases which are pivotal in the development of cybersquatting law ACPA are, Intermatic v. Toeppen 947 F. Supp. 1227 (N.D. Ill. 1996) and Panavision v Toeppen 141 F.3d 1316 (1998). In both cases, plaintiff was favoured by the court. These two cases lead to awareness among the trademark holders on vulnerability of domain names and to be cautious about these modern day cyber extortionists or cybersquatters.

A victim of cybersquatting in the United States has two options:

– sue under provisions of the Anti-Cybersquatting Consumer Protection Act

– use an international arbitration system created by the Internet Corporation of Assigned Names and Numbers (ICANN)

Cybersquatting in India:

In India, several options are available for the victims to fight cybersquatting. Following are the options:

– Cease-and-desist letters can be sent to the cybersquatter

– Under ICANN’s rules bring an arbitration proceeding

– passing a lawsuit in federal or state courts

Cyber-squatting is a major concern especially for thedomains involving financial transactions due to the cybersquatters taking advantage in fooling people and robbing them by getting their credit card details. There are several IT teams dedicated to timely have a check on these domains.

The court in many cases realised that the Passing-off action existed where domain names are involved and also observed the presence of all characteristics of trademark in the domain names. Passing off action is where the defendant is restrained from using the name of the complainant to pass off the goods or services to the public as that of the complainant. It is an action to preserve the goodwill of the complainant and also to safeguard the public.Passing-off is the principal used in India for deciding cybersquatting cases. Hence the Passing-off principle is interpreted by the courts in context to domain names.

Urgent need for definite laws in India:

– The current situation calls for an urgent need of implementing a strict law in order to have the cybersquatters punished and to avoid these crimes in the future.

– New law should provide the trademark owners legal solutions against the defendants so that the plaintiff can obtain statutory damages and gain compensation for the damages for registering in bad faith.

– A law which would act like a weapon for protecting the intellectual property of the trademark holders in the online world

Well-known Cases in India:

Yahoo, Inc. v. Akash Arora and Netlink Internet Services

Facts of the case: Yahoo, Inc. the plaintiff, a global internet search and information network, filed an action against Akash Arora and Netlink Internet Services the defendant for passing off its services on the internet as those of the plaintiff’s by adopting the domain name “yahooindia.com”.

The domain name “yahooindia.com” was registered with Network Solutions Inc. (NSI) since 1995. The plaintiff had obtained the registrations on the trademark YAHOO or variations thereof in approximately in 69 countries, although not in India.

The defendant registered the domain name “yahooindia.com” with the NSI in November 1997, as well as 16 variations containing the name YAHOO. The plaintiff objected to the defendant’s use of the domain name.

The defendant responded by modifying the announcement of its forthcoming website and by including the disclaimer that “//www.yahooindia.com” had no connection with Yahoo, Inc. of California, USA. The defendant thereafter activated its website and adopted substantial parts of the plaintiff’s Singapore website named “yahoo.co.sg” which contained a section on India.

Contentions: The defendant submitted that a website, unlike a trademark, is a specific address and that its disclaimer would eliminate any confusion. The defendant further pointed out that there was no protection for services in India and that no goods were involved in this case.

In addition, it claimed that, contrary to the plaintiff, its website offered only content specifically directed to India, that “Yahoo” was an English dictionary word available to all, and Internet users, who are usually sophisticated, would know the difference between the two websites.

Decision: The Delhi High Court rejected the defendants’ arguments, on the grounds that the trademark law applies equally to domain names on the Internet and that, where the parties are in the same or similar line of business, the use of similar names would result in confusion and deception.

The court held that the disclaimer entered by the defendants on their website did not reduce the likelihood of confusion and that the plaintiff had obtained registrations on the trademark YAHOO and variations thereof in 69 countries.

According to the court, the mark was widely publicized and well-known and the fact the “Yahoo” was a dictionary word was no reason to deny protection for the mark. The court also held that, although internet were technically educated and liberate, this would not reduce the risk of confusion.

Conclusion:

Envisioning the present conditions existing around the world, cybersquatting is considered to be a menace with no frontiers. Cybersquatters have robbed businesses of their fortune. Cybersquatting is acting as an eye-opener to the government in all countries and requires serious attention. Countries need to protect the spreading of this virus.

The active involvement of WIPO in resolving disputes regarding domain names has played a vital role in evolving concrete principles in this field. It provides a streamlined, cost-effective and swift procedure to review the claims before it. Also the prevention of cybersquatting revolves mainly around two acts, the UDRP and the ACPA. Both of these systems have their advantages, but they must be used properly in order to achieve the desired result. The UDRP provides a method for quick resolution of a dispute whereas the ACPA allows for an extended legal battle with the potential of large monetary settlements being awarded. However, both systems help to provide security and structure to the complicated and widespread problem of cybersquatting. These acts, along with the legal system, are the only protection available to those who wish to defend themselves from cybersquatters.